May 2018 Employment: Annual Phantom Boost or National Wave?

We’re cynical about Rhode Island employment data around here, so the current boost in the numbers for May can’t help but look similar to the annual bulge in employment and jobs that seems to be revised away after the end of the year. However, a strong economy across the country may very well make this the real deal, even for the Ocean State. For the second month in a row, employment, labor force, and RI-based job totals from the Bureau of Labor Statistics (BLS) were each up by more than 1,000 people, which is certainly an encouraging sign.

The following chart shows the employment and labor force data from surveys asking Rhode Islanders whether they consider themselves employed or looking for jobs. The unemployment rate is the difference between these lines.

Because both labor force and employment increased, the official unemployment rate improved only slightly. However, measured against an alternate reality in which so many Rhode Islanders didn’t stop looking for work after the last recession, the improvement would have been larger, from a 7.1% unemployment rate in April to 6.8% in May. Of course, this also means that 2.4 percentage points of the improvement in the official unemployment rate over the past decade has come from people’s leaving the labor force.

Also of interest, this month, is that Rhode Island’s neighbors are going in different directions. Massachusetts continues to shoot ahead, with employment, while Connecticut is losing ground. Of course, Connecticut is starting from a much better place than Rhode Island and still has more employment than it had before the recession.

Broadening our view to the entire country shows that Rhode Island’s employment improvement isn’t really anything to brag about, at least not yet. The Ocean State continues to be at the tail end of a cluster of states that still haven’t made up all of their employment from pre-recession peaks.

The monthly chart showing employment versus jobs based in the state illustrates that the much-proclaimed milestone of 500,000 jobs has been a long, slow slog, not an acceleration under the current governor. Indeed, the rate of growth has been slower over the past few years than the years prior.

The last chart for this monthly report shows New England states’ positions on the Rhode Island Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI). JOI takes into account 12 data points, including these employment and jobs numbers as well as income, taxes, and welfare, and it finds Rhode Island to be 47th in the country.

In addition to employment, labor force, and jobs, Rhode Island saw an improvement in Medicaid enrollment from JOI’s perspective, which means a decrease. On the other hand, the federal government has begun footnoting its SNAP (foodstamp) releases to point out that Rhode Island hasn’t been able to update its numbers for that welfare program since January 2017 thanks to failures of the Unified Health Infrastructure Project (UHIP).